Arbitral compensation based on land potential is a question of fact, not law, and warrants no Section 34 interference.

Land measuring 3,939 sq. m. in Sy. No. 197, Kenchanakuppe Village, was acquired for widening NH-275 following notifications under Sections 3A and 3D of the National Highways Act, 1956.

The initial compensation was fixed at ₹79 lakh per acre. On the landowner’s challenge, the Deputy Commissioner, acting as arbitrator, enhanced it to ₹1.58 crore per acre, considering the land’s location, development potential, nearby transactions and guideline value

NHAI’s application under Section 34 of the Arbitration and Conciliation Act, 1996, was dismissed by the Principal District and Sessions Judge, Ramanagara. NHAI appealed under Section 37(1)(c)

1. Whether the arbitral award enhancing compensation disclosed a ground for setting it aside under Section 34 of the Arbitration and Conciliation Act, 1996

2. Whether the High Court, in the appeal, should interfere with the Section 34 court’s decision upholding the award

The acquisition proceeded under Sections 3A and 3D of the National Highways Act, 1956

The challenge to the arbitral award was governed by Section 34 of the Arbitration and Conciliation Act, 1996, and the appeal by Section 37(1)(c) of that Act.

The Court treated the determination of fair compensation as a question of fact and held that the arbitrator’s assessment, based on the land’s potential use and guideline value, did not warrant interference absent an applicable ground under Section 34

No precedent was cited.

The arbitrator considered that the property lay within the Bidadi Town Municipal Council limits, in an area with residential, industrial and commercial development, and assessed nearby land transactions and guideline values in fixing compensation

The High Court found that the Section 34 court had properly considered the arbitrator’s reasoning and that NHAI had established no ground for setting aside the award.

Because the compensation assessment was factual and supported by the considerations identified by the arbitrator, the Court found no basis for appellate interference

Any pending interlocutory applications were also disposed of